S&P rates Dematic, notes B

Standard & Poor's said it assigned a preliminary B long-term corporate credit rating to Dematic Holding Sarl, along with a preliminary B rating to the company's proposed $300 million senior secured notes with a preliminary recovery rating of 4, indicating 30% to 50% recovery in a default.

The outlook is stable.

The ratings reflect Dematic's financial risk profile, which is classified as highly leveraged, the agency said.

The planned dividend recapitalization via debt issuance would lead to a leverage ratio of about 4.5x in 2011, S&P said.

The major constraint on the business risk profile is Dematic's weak historical profitability, combined with considerable volatility, S&P added.

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